What You Need to Know
If you own an S Corporation (S-corp), the annual federal tax filing deadline is March 15.
S-Corps don’t pay federal income taxes directly. Instead, profits and losses pass through to the owners’ personal tax returns, where they are reported and taxed. This allows for potential tax savings but also means your business return (Form 1120-S) needs to be completed before, or alongside, your personal return.
There are benefits to filing on extension! See below for examples.
Most S-corporations file an extension each year. Industry estimates suggest roughly two-thirds of S-corps extend their March 15 filing deadline in order to finalize bookkeeping, shareholder allocations, and K-1 information. This number is slightly higher for partnerships, or as high as 80%.
Entity type | % that extend (approx.) |
|---|---|
Partnerships | 70–80% |
S-corps | 60–70% |
Individuals | 15–20% |
C-corps | 50–60 |
Federal Tax Obligations
All taxes flow through to the owners’ personal tax returns.
State Tax Obligations
While the federal government doesn’t tax S-corp income at the corporate level, state tax obligations can vary. Most states align with the federal deadlines and offer automatic extensions alongside the federal ones.
Some states impose taxes or fees on S-corps, which may also be due by March 15. These are due even if your business extends its time to file.
For example:
•California: Requires S-corps to pay a franchise tax, which is the greater of 1.5% of net income or a minimum tax of $800. The due date aligns with the federal deadline—March 15.
•New York: There is a fixed dollar minimum tax based on the corporation’s New York receipts.
•Minnesota: Requires S-corps to pay a minimum fee based on property, payroll, and sales factors. This applies above a sales threshold of 1,160,000. The state return is due by March 15.
Please refer to your state’s regulations or reach out to us if you have questions. It’s the business owner’s responsibility to file these, and we’re here to help.
Because S-corp profits and losses flow to your personal tax return, it’s best to review both together. Your Schedule K-1, which reports your share of business income, deductions, and credits, is a key document for completing your individual return.
If you’re not ready to file by March 15, and many businesses aren’t, you can file an extension, giving you until September 15 to submit your S-corp return. However, this does not extend the time to pay taxes owed. You still need to estimate and pay any tax liability to avoid penalties and interest.
To stay on track, work with your accountant to finalize your books, review your tax position, and ensure all necessary documents are in order. Whether you’re filing by the deadline or requesting an extension, keeping your S-corp and personal tax filings aligned will help you avoid surprises and stay compliant.
Benefits of filing on extension
We’ve seen business owners benefit from extensions in these situations. They work in your favor when the specifics of the law and specifics of the computer systems of the IRS are taken into account:
Benefit – more time to contribute to some retirement plans
If you would like some more time to contribute, your business extension can work in your favor. Please check these with your plan administrator or tax professional to make sure they fit your situation.
SEP IRA – Employer contributions can be made up until the extended tax filing deadline. (IRS FAQ)
Solo 401(k) (employer portion only) – Profit-sharing/employer contributions can be made by the extended deadline, assuming the plan was established in a timely way.
SIMPLE IRA (employer portion) – Employer contributions can generally be made by the extended business tax filing deadline (Sept 15).
Benefit – extensions highlight processing issues at the IRS
This falls in the strange, but true category. It’s a very clear benefit. We’ve worked with business owners who have filed S-corp returns for multiple years, and those returns are accepted. We’ll often file a “canary” extension to make sure their status at the IRS is clear. If the IRS has unclear S-corp status, the S-corp extension will be rejected, even though the returns attached to that S-corp have been accepted. An S-corp extension, rejected, lets you and your tax team drill down to arcane S-corp filing issues quickly.
Drawbacks to filing on extension
There are at least two key drawbacks:
- You’re still responsible for paying state taxes by March 15. If you’re an experienced business owner, you will know these dates in California, New York. If you’re new to your business, check with your tax preparer.
- It just feels better to have everything done by the first deadline. We get it. This does feel good.
What if March 15 falls on a weekend?
Tax deadlines move to the next business day when they fall on a weekend or holiday. If March 15 falls on a Saturday, the deadline will normally be the following Monday.
Pair S-corp and personal returns
We often recommend reviewing the business returns together with your personal return. It’s common to go on extension for business, personal, or both, to make sure these can be seen holistically by the business owner and their tax preparer. There’s no additional cost for this when you work with us.
Pair S-corp and personal payments
If you don’t have any state payments due on 3/15, most are due by April 15, regardless of whether you extend the individual tax filing date for your household. Read more about 4/15 here.
